There’s been an interesting confluence lately of liberal bloggers noting the same general tendencies among ostensible advocates of “free markets” and “small government” in the GOP.

Jacob Levy recently noted a weird proclivity, among “small government” Republicans, to defend private corporations’ revenues from corporate welfare as some sort of entitlement. In the case of student loan legislation, he wrote: “In the last two weeks, I haven’t seen any Republican official or Republican-leaning intellectual make the slightest reference to the problems with a system in which private lenders make risk-free profits by lending on the back of a federal guarantee…. And the (misleading) headline, the reference to a Soviet-style takeover, crystallized this for me…. [T]here are people on the right who think that the subsidized revenue streams to which lenders had become accustomed were a kind of property that has now been seized.”

Matt Yglesias sees “something similar in the fulsome conservative defenses of the prescription drug tax giveaway that the Affordable Care Act repealed.”

On the same theme, Ezra Klein (in a post appropriately titled “Contracts are only sacred when rich people are getting paid”) points out an uncomfortable fact about the Republican politicians currently defending the sanctity of contract against attempts to write down loan principals to market value on underwater mortgages: they’re the same people, by and large, who were screaming a year ago that union autoworkers should “change their contracts to remain more in sync with the times.” When it comes to labor agreements, contracts and promises to repay “don’t appear to be all that sacred.”

Money quote from Yglesias: “This is how the political right operates—there’s a lot of rhetoric about free markets, and a lot of institutions that are staffed by people who very sincerely believe in free markets, but no real organized political movement on behalf of free markets except insofar as market-talk bolsters Republican Party electoral fortunes or rich people’s desire to pay lower taxes.”

Yglesias also remarks, in another post, that the main difference on property rights between left and right “is simply that the right is invested in a lot of rhetoric about markets and property rights and the left is invested in different historical and rhetorical tropes” (namely “economic equality”). But the axis of political conflict between left and right in the real world revolves around “some stuff some businessmen want to do” versus “some stuff businessmen hate,” and has little to do with “anything about markets or property rights per se.”

He’s definitely seen into the “small government” heart of darkness. For close to 100% of Republican politicans who talk about “free markets” and “small government,” and for a dismaying portion of the beltway libertarian movement, “free markets” simply mean whatever is profitable for big business. Loathesome walking infections like Dick Armey should be aware that Yglesias and Klein have their number.

For the folks at Adam Smith Institute and Heritage, it’s better that a government function be “privatized” by farming it out to a private corporation, even if it’s funded by tax revenues and its market and profits are guaranteed by the government. Just the fact that the money is being funnelled through a nominally “private” entity makes it more “libertarian”—because, after all, “free market” simply means “good for business.” A real libertarian, on the other hand, would identify the crux of statism as coercion and involuntary funding, and define such “private” enterprises as just another part of the state. Such fake “privatization,” arguably, only exacerbates the statism by adding another layer of parasites to be fed at taxpayer expense.

Yglesias strikes me as a kind of near-libertarian Festus (Acts of the Apostles, not Gunsmoke): “Almost thou persuadest me…” His posts, frequently, take a form something like this: A libertarian case for x could be made. But since I’m aware of no libertarians actually making a case for x—they seem to be only interested, despite their principled rhetoric, in defending a particular set of economic interests—I’ll make the libertarian argument for them even better than they can….

Believe it or not, Matt, we’re not all pot-smoking Republicans. One of these days you should come by C4SS, the Alliance of the Libertarian Left, and assorted other left-libertarian sites; you might find that some libertarians have been making those kinds of arguments all along.

7 comments

I thought this quote from his article was interesting: “the overall concept of a state apparatus that simply sits on the sideline watching the free market roll along is impossibly utopian.”

Well, duh! Intervening on behalf of powerful actors is what states do!

But in that case, the liberal concept of a state that actively intervenes AGAINST the dominant concentrations of power in a society must be even more impossibly utopian. At best, from the standpoint of the ruled, if the state becomes a football in the competition between rival concentrations of power, one of those concentrations of power may marginally improve things for the non-privileged as a side-effect of promoting its own interests. We’re back to Tolstoy’s “Parable.”

I have to agree with Yglesias, based on my encounters with "libetarians" at LvMI, Cato, CEI and MasterResources, that many libertarians "seem to be only interested, despite their principled rhetoric, in defending a particular set of economic interests".

But there are a few now and then who surprise me. Kevin and Roderick, do you know Kevin Dowd, and have you seen his comments about the need to end limited liability in banks?

"Finally an LvMI commentator who sees the elephant in the room: effective reform to rein in rampant moral hazard at banks means removing limited liability! – TT's Lost in Tokyo" http://bit.ly/atelEr

I haven’t read a whole lot of Yglesias, but I don’t get the impression that he’s interested in going much beyond pointing out the hypocrisy of “limited government” types.

Re: the prospects of Matt visiting C4SS, b-psycho once dropped a link to this website in the comments section of one of Yglesias’ posts, and the response was, to put it mildly, not positive. There were a few cracks about being “Rand-rolled” and a comment or two about how anarchists are irrelevant. Granted, these were commenters, not Matt himself, but I’m guessing the apples don’t fall too far from the tree over there.

Joe: Not necessarily. Matt’s commenters are about as likely to jump on *him* for being too neoliberal. Every time he posts something about deregulation of this or that helping poor people, there’s one guy who jumps on him for being a “trust fund baby” who doesn’t care about regular people.